NEW DELHI:

The Centre will end freight incentives for sugar exports on October 1, food and agriculture minister Sharad Pawar said on Tuesday, following protests from exporters like Australia, Brazil and Thailand. Last April, the government offered sugar mills a subsidy of more than $30 a tonne to help exports and cut huge stocks. The incentive was to run till mid-April, 2009. “Some countries have been voicing concerns at the WTO over freight subsidies given by the government,” Mr Pawar said. He said the country was likely to produce 26 to 27 million tonnes of sugar in the crop year ending in September. “The country would export around three million tonnes of sugar, but has the potential to make it five million tonnes and I will be happy if that happens,” Mr Pawar said. The country annually consumes 20 million tonnes of sugar. Last July, the government said mills exporting by road or rail to neighbouring countries such as Nepal and Bangladesh would be paid the lower of their costs or the subsidy. Meanwhile, sugar futures eased on Tuesday after rising nearly 4% in about a week, but hopes the government may free the industry from controls when the annual Budget is unveiled on Friday slowed the drop. The March contract on the NCDEX eased 0.1% to Rs 1,447 per 100 kg, and the April contract fell 0.2% to Rs 1,510. “Profit-booking was expected after the markets rose in anticipation of good summer demand,” an analyst said, adding he expected the market to rebound. The sugar trade in India is controlled by the government, which sets a monthly limit on the quantity that millers can sell freely in the market to ensure stable supplies and prices in the nation of more than a billion people. Every year before the Budget there is talk the government, which has liberalised most parts of the economy, will open up the sugar sector but this has not happened so for.